Co-op's capital shortfall results in new boss deliberating the clawback of senior bonuses

The Co-op is considering clawing back bonuses awarded to former executives in the run-up to the crisis in its banking arm.

Sources said the Co-op’s new group chief executive Euan Sutherland is looking at whether clawbacks of past bonuses are appropriate. It is not known which executives may be in line to forfeit their payouts.

Peter Marks, the recently-retired group chief executive, received a £103,000 long-term performance bonus in 2012 and a £490,000 annual bonus for the 2011 period.

Rewards: The huge pay packets have been critcised due to the bank's status as an 'ethical' establishment

During that time, the Co-op was moving inexorably closer to the disastrous failure of its bid to take over more than 600 branches from Lloyds and a devastating credit downgrade. His total pay in 2012 was £1.3million. Luke Hildyard, head of research at the High Pay Centre, said: ‘The whole point of the Co-op is that they should conduct themselves in an ethical way and their pay policy should reflect this.

‘They should not have been throwing around huge bonuses in the first place. I bank with the Co-op and I am horrified. This is not what I signed up for. The fact the bank is in such difficulty is pretty good grounds for clawback. I can’t imagine a clearer case.’

Barry Tootell, who earlier this month quit as chief executive of the Co-op Bank, made £595,000 last year. He is in line for a year’s basic salary as a pay-off.

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He was awarded £263,000 in long and short-term bonuses in 2011, when he took over from Neville Richardson, former supremo at Britannia Building Society, which Co-op took over in an ill-starred deal in 2009.

Richardson left with £4.6million under his belt, including £1.39million for loss of office and £329,000 in bonuses.

It has also emerged that another top boss is to quit.

Stephen Humes, the finance director of the Co-op Group, is leaving as part of a drive spearheaded by Sutherland to strengthen the top management team.

A successor to Humes, expected to be a heavyweight banking industry figure, will be announced shortly along with a raft of further management changes.

Humes is the latest in an exodus of senior managers, all of whom have left with their pockets well-lined. Humes, who was paid £577,000 including a £9,000 long-term performance bonus last year, is likely to receive at least a year’s money as a pay-off. He received a £202,000 performance bonus for 2011, when he took the top finance job having previously worked in the food division.

Sutherland is to hold a crisis board meeting on Friday where he will brief directors on the progress being made in talks with City regulator the Prudential Regulation Authority over the bank’s capital shortfall, estimated at up to £1.8billion.

Sources said these talks have so far been ‘reassuring’. But sales of assets are thought unlikely to raise sufficient funds and sources indicated that a haircut for bondholders is on the cards.